The key is act quickly and I think that means before June. Look at how hard it has been for Apple to negotiate new content deals (have you seen the selection in iBooks?) and then realize a new deal is many times easier to reach than repairing a broken relationship. Once the content providers feel scorned and pull out, they will require some MAJOR concessions from Apple to come back. If the loss of content hurts Apples sales, especially in the tablet space, I would bet against the content coming back for many many years, if ever.

Still, I think a great deal of dammage has been done already. The content providers are uniting against Apple already. All the content not currently available through iTunes or iBooks is now less likely to ever show up there. Why negotiate any deal with Apple when the rules can change 3 or 4 times in the next 3 years? Why invest time and money in an iOS app that could get pulled before it generates enough profit to pay for itself? Why go through the hassel to put your content on iOS if your customers will buy it anyway on some other device? Do you have any idea how much movie, TV and music content the now scorned Sony controlls? Do you think the average consumer would rather do without all that content or live without an Apple product? The history of the Mac should give that answer pretty damn quick. I will go out on a limb anbd say as of this week Apple now has no chance of making big inroads into the TV/living room market. Apple TV is doomed to niche status because it will now never have a majority of the content available to other devices. At least not for the next 5+ years and that will be more than long enough to kill it.

I think the last bit is probably overstated.

Apple enjoys a strong relationship with Disney by virtue of Steve's stockholdings and his position on the board. If music content becomes a real issue, look for Apple to buy one or both of WMG and EMI.

Apple will not allow itself to be without content although books and periodicals could prove problematic.

Simple Arithmetic? If a developer was selling $10 subscriptions to 100 people before the 30% fee that's $1,000. Now if you sell $10 subscriptions to 130 people (30% more unit sales) that's $1300 which makes the publishers take $910. To break even the publisher needs to sell at least 43% more subscriptions on iOS or hike up the price considerably.

Your making a fatal assumption - that the publisher would get the iOS-based subscribers anyway. Clearly a portion of those new subscriptions - probably the majority of them - came to the publisher due to their presence in the iOS ecosystem. That has value. If publishers think they can do better by not participating, they will leave.

I highly doubt anyone will leave. There might be some posturing, and someone might leave for a while, but it won't be permanent.

It's like the current federal budget proposal - overestimate the military spending for the next 10 years, then "cut" the inflated estimate to generate "savings"....

There would have been a lot less backlash if Apple had done the 90/10 cut

Really? Why do you think that? For some people even if Apple took no cut there would be some backlash over a perceived slight.

Apple isn't automatically getting 30% of all subscriptions of people who use iOS apps, just subscriptions that are started from within iOS apps. And publishers can still woo and start new subscribers outside of their iOS apps - they just have to make the same deals they have on the outside available within their iOS app.

Basically if the iOS ecosystem brings a publisher a new subscriber, presumably a subscriber they wouldn't have gotten access to previously since Apples new subscription model is simply another way for publishers to get new subscribers - it's not replacing any of their existing mechanisms. That new stream of new subscribers has value. Apple has indicated that they think that value is 30%.

30% for an opportunity that a publisher wouldn't have had at all before is actually pretty darn good. The fact that so many fail to grasp this shows just how few of the pontificators have any kind of real life business experience and any idea or concept of things like the costs and efforts that publishers go through trying to attract new subscribers.

Hence I predict you will see very little churn in the availability of these apps.

Just like with the Verizon launch of the iPhone - between early termination fees, an iPhone with less than six months before the new model comes out, Verizon's longer term before they subsidize a new phone and the fact that AT&T doesn't suck nearly as bad as those in the blogosphere would have everyone believe - lo and behold there was no mass exodus from AT&T to Verizon as was predicted. The only people surprised are the clueless or those who are too inexperienced to factor in the true costs. And although I haven't gotten to the Verizon thread yet, I have no doubt there is a large cadre of people totally misreading the Verizon sales and interpreting it as a "failure" - in another 8 months when the iPhone 5 will have been out for a bit and peoples contracts on other carriers are expiring things will be very interesting indeed...

I prefer Netflix pull their app rather than raise prices to cover the 30%. Watching movies on that tiny screen really isn't worth paying any more for.

Why are you assuming Netflix will raise their prices because a few of the many new subscribers they get each month might do it via their iOS app and therefore Apple will get 30% of those new iOS subscribers?

Why do you assume Netflix would view that 30% cut as a negative?

Why do you assume that attracting a new subscriber for Netflix is free outside the iOS ecosystem and that the 30% that Apple wants for bringing Netflix a new subscriber is a 100% parasitic fee?

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Netflix has already raised their prices since adding streaming.

What does that have anything at all to do with the subject at hand?

Damn, I have seen allot of grasping in AI threads in the past, but this thread is taking the cake over all of them! The amount of ignorance over basic business concepts is simply breathtaking. No wonder democrats/liberals/left wingers can get away with demonizing business so easily - people really have no basic understanding or remote concept of how our economy functions. No wonder we are trillions upon trillions in debt and very few people are seemingly concerned

A company will drop iOS in a HEARTBEAT if Apple makes it impossible to make a profit, no matter how many users there are.

Sure, they'll try and work something out with Apple, but if apple sticks with this, they'll lose companies. 100+ net loss customers isn't something any company would accept apple's terms to keep.

If I let you open a store on my block, and I told you 100 people would buy from you everyday it sounds great. Then I tell you that I'll take 30% off the top of each sale and your margins are only 20%.

What would you do?

Since I stated in my post that Apple needs to "act quickly" I think my position is pretty clear. Further, since I've said repeatedly in a number of threads that I think Apple should be paying 5-10% for subscription content, my position is even clearer.

I am not sure what the answer is about other resellers. Apple may feel they don't need them (I don't agree). I referred in another post to Kindle, Netflix and a few others as being the equivalent of anchor stores in malls. They pay reduced rents because they draw people to the mall. Apple needs to recognize the value of "anchors".

I think 30% for app developers is reasonable. Apple hosts the app and delivers it plus handles payment processing. Just setting up an e-commerce site and opening a merchant account could approach that 30% figure.

Kindle and Netflix probably have the majority of their sales, and will likely continue to have the majority of their sales outside of the in-app purchase model and thus outside the 30% cut.

And for the subs landed inside the iOS ecosystem, 30% is a paltry amount to pay for a new subscriber. Do some googling to see how much the average magazine spends to attract new subscribers. Those who are acting like Apple is taking some huge cut are demonstrating just how little of business they truly understand.

Perhaps, so. But Apple wants that same cut in perpetuity.

The better approach to your example is that the app carry an initial price to reflect customer acquisition and then subscriptions are paid at a reduced rate.

Rhapsody is circling the drain. They are a failing business model - file this one in irrelevant posturing to gain desperately needed publicity in the "any press, including negative, is a good thing" school of thought.

Your making a fatal assumption - that the publisher would get the iOS-based subscribers anyway. Clearly a portion of those new subscriptions - probably the majority of them - came to the publisher due to their presence in the iOS ecosystem. That has value. If publishers think they can do better by not participating, they will leave.

You are really overstating here. DO you honestly believe that people would not seek out the NYT, WSJ or Economist were it not available on the iOS. In fact, most those iOS subscribers would be expecting to find such majors in the App Store.

Fortunately, for anyone who already has a subscription, the publisher can do their own in-app authorization to deliver content in iOS. However, they will also need to add the in-app purchase option.

Hey now, your not supposed to challange the superiority of forum posters with things like facts!

If you spend some time reading, you'll see that many publishers felt this decision was made without consultation. That's why so many are up in arms and why the EU publishers want an anti-competition hearing. It seems that most of the "consultation" was done with Murdoch for The Daily.

The better approach to your example is that the app carry an initial price to reflect customer acquisition and then subscriptions are paid at a reduced rate.

The better approach is that the people who this affects make the proper decision and people who are totally unqualified to judge at least admit they are talking through their hat and blindly speculating.

If you spend some time reading, you'll see that many publishers felt this decision was made without consultation.

And for many of them that's probably true. Oh well! Apple is running a business, not a democracy. And even if it was a democracy majority rules. Sometimes life isn't fare. That's what makes it interesting!

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That's why so many are up in arms and why the EU publishers want an anti-competition hearing.

No offense, but unless European companies get shit handed to them on a silver platter they are always crying off about anti-competition. It's far easier to compete through government than innovation. Sadly it's not unique to Europe - it's starting to become popular over here too

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It seems that most of the "consultation" was done with Murdoch for The Daily.

Yup, "I don't like Murdoch or the autocratic Apple therefore they are one in the same" - what a great and well reasoned argument.

Ya know what? Let's see how many Apps disappear at the end of the month. And then let's see how many are back within six months. Because at the end of the day all the theoretical discussions in forums like this are so much BS. Companies actions will be driven by money and profit, and despite all the ill informed and short sighted reasoning in threads like this, there is a ton of money to be made through the iOS ecosystem. Smart companies will be there to exploit it. Others will be complaining and making excuses (hmm, just like Rhapsody).

It's the "App store walled garden" tempest in the teapot all over again

Because of Apple's clear history of making rash and unfounded decisions?

Because of a bunch of hysteria from competitors and bloggers and pundits?

Thanks for adding some sanity to this thread, which has been littered with hysteria that the sky is falling. I think the hysteria is premature to say the least, and I give AppleC credit for doing a pretty good job making business decisions over the last several quarters.

The fretting over the 30% cut of digital content subscriptions and the other recent changes announced is rash, and I think a wait and see attitude is appropriate. Apple could very well make adjustments down the road if they are deemed necessary, although I'm not convinced that they are. Keep in mind, AppleC is in the business to make money (and they've done very well), and 30% of no sales is zero, so they clearly want this new venture to succeed for them and their partners. I have no doubt that they carefully considered the terms they are asking and felt justified in doing so.

Remember that this is a new business model, just as the app store was. I say give it time to mature. As for publishers on the sidelines, I think Rupert Murdoch has the better idea; jump in with Apple's terms, and see about renegotiating later. He will have more leverage to do so if his product sells well than some other publisher who has chosen not to participate. Last I heard the publishing industry wasn't doing so well. 70% of new sales is better than no new sales.

He completely missed (or intentionally ignored) the major point of contention...Apple insisting on controlling the pricing models of those companies. Nobody has an issue with Apple taking a cut.

Even the 30% cut would be tenable, if the developers could control the prices they change for iOS subscribers. However, Apple is insisting on uniform pricing across the board while simultaneously demanding a huge cut in the iOS universe. It's that combination that makes the policy unpalatable for most.

And the argument that Apple provides services in exchange is BS. They don't promote your app or service, other than store rankings. And they don't host content (say for streaming services or ebook sellers). And until this policy, they weren't even processing transactions. Where's the value added other than exposure on iOS...which is of dubious value (how many people signed up for Netflix 'cause of iOS vs. people who had netflix before exposure to iOS) in some cases.

Yup, "I don't like Murdoch or the autocratic Apple therefore they are one in the same" - what a great and well reasoned argument.

Ya know what? Let's see how many Apps disappear at the end of the month. And then let's see how many are back within six months. Because at the end of the day all the theoretical discussions in forums like this are so much BS. Companies actions will be driven by money and profit, and despite all the ill informed and short sighted reasoning in threads like this, there is a ton of money to be made through the iOS ecosystem. Smart companies will be there to exploit it. Others will be complaining and making excuses (hmm, just like Rhapsody).

It's the "App store walled garden" tempest in the teapot all over again

Where did I say I don't like Murdoch? I commend him for taking a go with The Daily. And you will be hard-pressed to review my posts to find me chastising Apple for being autocratic - if anything, I more likely come across as a bit of a fanboy. You will also never have seen me comment on any Apple "walled garden".

We do agree that business is business. We disagree that this move will be best for Apple in the long-term. You may be right but I have a feeling that Apple will be making some adjustments in their subscription pricing.